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Are medical expenses a leading cause of bankruptcy?
Executive summary
Research and advocacy studies have long reported that medical problems contribute to a large share of U.S. bankruptcies—classic estimates put that share around 40–62%, and a 2009-style projection counted roughly 326,441 medical-related bankruptcies in one year [1] [2]. Other recent commentators and legal guides continue to say medical bills are a leading cause of personal bankruptcy, but available sources show variation in methods and definitions across studies and in how contemporary policy changes (like insurance reforms and credit-reporting rules) affect current counts [2] [3] [4].
1. The headline: many studies say medical problems are a major contributor
Multiple widely cited analyses find medical bills or illness-related income loss implicated in a large share of bankruptcy filings. Elizabeth Warren’s team reported that about 40% of filings involved medical causes and projected about 326,441 medical-related bankruptcies in one year [1]. A later survey-based analysis concluded that 66.5% of debtors cited either medical expenses or illness-related work loss as contributors, estimating roughly 530,000 medical bankruptcies annually under their definition [2]. Opinion and health-industry commentators continue to state that medical expenses are a leading cause of personal bankruptcy [3].
2. Different definitions and methods produce very different numbers
Researchers do not use a single standard definition of “medical bankruptcy.” Some studies counted filers who reported large medical bills, mortgaged homes to pay care, or lost work due to illness; others relied on debtor surveys asking whether medical issues contributed [1] [2]. That variation explains why one analysis yields ~40% while another survey approach reports two-thirds of filers citing medical contributors [1] [2]. Reporters and advocates sometimes cite the older “62%” figure from the Harvard/Warren work; consumer legal guides and practitioners echo the general conclusion that medical debt is among the most common problems in bankruptcy [1] [5].
3. Insurance coverage complicates the story
Studies and commentators emphasize that many people who go bankrupt from medical causes had some insurance yet still faced high out‑of‑pocket costs, coverage gaps, or lost wages after illness—factors that push families toward bankruptcy [2] [6]. The Economic Policy Institute summarized Harvard findings that 62% of personal bankruptcies involved medical costs and that gaps in coverage were a strong predictor; the Harvard work also reported high average out‑of‑pocket costs for insured filers [6]. Legal and bankruptcy guides note that even insured patients may incur deductibles, copays, or uncovered treatments that become unmanageable [7] [5].
4. Policy changes and more recent reporting matter — but sources are mixed or limited
Some recent legal and consumer‑facing pages state that new rules (for example, changes in credit‑reporting of medical debt) and the ACA altered risks of medical bankruptcy, but available reporting here does not provide a unified, up‑to‑date national estimate post‑ACA or after the latest insurance and credit‑report reforms [2] [4]. Commentaries written as late as 2025 reiterate that medical bills remain a leading cause of personal bankruptcy, yet they rely on prior studies and practitioner experience rather than a single new national study [3] [7].
5. What the practical guides and lawyers tell people facing medical debt
Bankruptcy and consumer law sites consistently present bankruptcy as a common and workable solution for medical debt: Chapter 7 can wipe out unsecured medical bills quickly for qualifying filers; Chapter 13 can restructure payments over 3–5 years [5] [4] [8]. These practitioner sources also emphasize alternatives—negotiating with providers, hospital financial assistance, or payment plans—and note that rules about reporting medical debt to credit bureaus may affect strategy [9] [4].
6. How to interpret the disagreement: strength and limits of the evidence
The convergence of multiple studies and practitioner reports establishes a credible pattern: medical bills and illness‑related income loss are frequently implicated in U.S. bankruptcies [1] [2] [5]. But because estimates hinge on differing definitions, retrospective self‑reports, and changing policy environments, there is no single undisputed percentage that covers every year or methodology [2] [1]. Available sources do not provide a single, definitive contemporary national count that reconciles these methodological differences or fully captures post‑ACA and post‑credit‑report changes [2] [4].
If you want tighter, up‑to‑date figures, you can ask me to summarize any one of these cited studies in detail, compare their methodologies side‑by‑side, or look for newer government or peer‑reviewed analyses that attempt a standardized national estimate.